During its meeting yesterday, Wednesday, the Egyptian Council of Ministers agreed to stop the export of onions for a period of three months, ending at the end of this year, as part of controlling prices in the markets, according to an official statement.
Onion prices in retail markets rose to historic levels, reaching 30 pounds per kilo.
Egypt’s onion exports rose by 221.1% during the first two months of this year to $30,003 million, compared to $9,343 million in the corresponding period last year, according to government data.
Mustafa Al-Najari, Chairman of the Agriculture Committee of the Egyptian Businessmen Association and a member of the Export Council for Agricultural Crops, said that the Council of Ministers’ decision to stop the export of onions for a period of 3 months will have an impact on prices in the local market at the beginning of next October.
Al-Najari added that the Cabinet’s decision still requires clarification about the types of onions that will be included in the ban and whether they will be dried or green, for example, according to Al-Mal newspaper.
India charges fees
Last August, India imposed a 40% export tax on onions, to ensure local availability and calm the domestic inflation crisis, and it will take effect immediately until December 31, according to the country’s Ministry of Finance.
Retail prices of onions in India rose about 20% year-on-year, averaging about 30.72 Indian rupees (37 cents) per kilogram in the August 19 session, compared to 20.44 rupees in the same period last year, according to data from the Indian Ministry of Commerce.
Heavy rainfall in July 2023 in key producing areas of Maharashtra and Karnataka damaged stored onion crops, said Bhushan Sharma, Director of Research at CRISIL Market Intelligence and Analytics.
Prices calm down
Al-Najari said that the Egyptian Council of Ministers had received proposals from those responsible for the sector, including stopping the export of onions for a specific period of not less than 3 months, or imposing a duty on it or exporting the commodity, or reducing the quantities exported to each company, and the Council studied all the proposals and decided on the decision taken.
He pointed out that the Council of Ministers took the decision to have a rapid impact on the markets to calm prices after they flared up and reached insane levels, as a result of the export of large quantities, explaining that the suspension period is good, especially since the new season begins in February.
The head of the Agriculture Committee of the Businessmen Association confirmed that some companies will submit exceptions to the Council of Ministers for a specific period to implement onion export contracts that were agreed upon before the decision was made, to prevent them from being significantly harmed, which may be met with for a specific period or in limited quantities.
Nasr Abdel Wahab, member of the Export Council for Agricultural Crops and head of Al-Safa Company for Packing and Exporting Vegetables, also confirmed that the decision to suspend the export of onions came in response to the demands of many parties due to the significant increase in its price locally.
He revealed that the reason for the rise in prices locally is the current intensity of exports with the entry of new segments into the field who are mainly importers of other goods, with the aim of providing dollar liquidity, calling on the Council of Ministers to adjust import mechanisms during the current stage.
Data from the Central Agency for Public Mobilization and Statistics in Egypt showed that annual consumer price inflation in Egyptian cities rose to 37.4% last August from 36.5% in July of this year.
On a monthly basis, prices in August rose 1.6%, down from 1.9 in July.
According to the agency’s statistics, food and beverage prices rose 71.4% year-on-year in August.